Intel to provide Web hosting for eBay

The chipmaker will host some of the auction giant's Web servers under an agreement the companies plan to announce next week.

March 31, 200211:20 AM PST

Intel's online services division will host some of eBay's Web servers under an agreement the companies plan to announce next week.

Intel will start hosting eBay's hardware next quarter, Intel spokeswoman Erica Fields said. Fields declined to discuss the financial details or the duration of the deal.

The move is part of eBay's effort to diversify where its servers are hosted, Fields said. Spreading out the server locations increases stability since one event won't necessarily affect all the servers. Exodus, Qwest and Sprint currently host most of the company's hardware, eBay said in its recently filed annual report. Fields did not know what portion of eBay's servers the company would transfer to Intel.

"I think they are still working through their plans," Fields said.

eBay representatives did not return calls seeking comment.

The auction giant has moved to diversify the hosting of its backend systems before. After suffering through a series of prolonged outages in 1999, the company contracted with AboveNet to help manage some of its backend.

eBay has spent millions of dollars over the last three years to increase the stability and reliability of its service. As part of that endeavor, the online auction company is upgrading its backend systems through its "V3" initiative.

The deal is a significant success for Intel's online services division. The chipmaking giant launched the division in 1999, during the height of the Internet boom. Although the division has drawn some high-profile customers, such as the American Stock Exchange and Sony, the venture has not lived up to Intel's expectations. Intel curtailed spending and cut jobs at the Web hosting division last year.